As experienced buyers agents, we pride ourselves on our ability to negotiate our clients the best possible deal. In fact, next to our deep market knowledge, we believe this is one of our biggest strengths. We also understand that it is one of the main reasons investors rely on us to help grow their portfolios.
But while we may be more adept at negotiating property purchases than the average buyer, our approach is not that different. To us, success is more a matter of understanding the process, making informed decisions, and acting with confidence. That said, there are also a few simple things we do to increase our chances of securing a great outcome.
Here we share our advice on negotiating like a buyers agent. We cover the preparation we do and how we usually approach discussions with agents. We also recommend a few practical ways to make sure you are getting a good deal.
A great real estate negotiator needs to be prepared with a strong background knowledge. Start by getting to know what the market is doing and where the property sits within the market. One of the best ways to do this is to look at recent comparable sales, or comps, in the area. This should give you a sense of local price trends and what the seller should be expecting.
As a general rule, we recommend finding at least 5 comps. This will help you spot any obvious outliers, like properties that sold unusually high due to an overly invested buyer. We also suggest trying to keep your comps as current and close to your target property as possible.
Also look at what else is on the market in the same area, at the same time. This is effectively the property’s competition and can have a significant impact on price expectations. Put simply, the more choice buyers have, the better the chance you have of securing a great deal.
Different vendors will have different motivations for selling and, for most, the ideal offer will be about more than money. From shorter (or longer) settlement periods to larger deposits, there is a range of terms you can offer to sweeten the deal. But first, you need to know what the seller is looking for.
To help with this, we recommend taking the time to build a rapport with the agent. They are the seller’s gatekeeper and can be a source of a lot of important information. They are also far more likely to share valuable details, like the seller’s motivations, with a buyer that they like.
Being in with the agent should also allow you to get a good idea of how the negotiation process will go. In particular, you want to find out how they handle offers and how they manage competing buyers. This will help you to plan your approach and minimise the risk of giving away too much information too soon.
Being a successful real estate negotiator means doing your homework, which will always earn you respect, particularly from the agent. So, before negotiations begin, make sure you do your market analysis and get the contract review by a legal professional. Also make sure you have all the required inspection reports (e.g. pest, building, etc.) done and your finances in place.
In addition to showing that you are serious, having everything organised will allow you to make an unconditional offer. For the seller, this is the holy grail of offers and will always be looked on more favourably.
While preparing, you should also take the time to work out exactly what you are willing to offer. As part of this, you need to decide your starting point, your walkaway point, and your general strategy. We also recommend coming up with at least two points of compromise you can offer up during the negotiations.
It is also worth having a clear Plan B if negotiations do not work out in your favour. For example, there could be another property you are interested in that you will pursue if this one falls through. Keeping this in mind should help you maintain perspective and not get too emotionally invested in the outcome.
If it does not look like you will be able to reach an agreement that works for you, walk away. Sometimes negotiations simply do not work out and there is nothing wrong with that. This is not a failure, it is you sticking to your guns and making sure you get a good outcome.
This is particularly important if you are an investor as every addition to your portfolio should be guided by the numbers. And, if the numbers do not add up, it is not an opportunity you should be taking. This can be a tough call to make but remember… there are always other properties!
Whether you want to sharpen your negotiation skills, or are just after property investment advice, Search Party Property can help. Our team of experienced buyers agents are experts in finding great investment opportunities, are expert property negotiators and highly experienced in securing the best possible deals. Contact us today to discuss your situation and how we can help you achieve your property dreams.